KPMG Defendants Want Postponement

The remaining five defendants in the KPMG tax shelter case are seeking a postponement in the trial until after October.

Judge Lewis Kaplan of the Southern District of New York dismissed charges against the other 13 defendants last month in the case. He blamed prosecutors for being overly aggressive in pressuring KPMG to stop paying the legal expenses for its former employees. The trial date for the other five defendants is set for October 16, but lawyers for the five say they will not be prepared to defend the case by that time. They are seeking an indefinite postponement.

They blamed government prosecutors for the muddle. "The situation was created by the government and made worse by its continuing course of conduct," they said in a court filing quoted by the New York Law Journal.

Prosecutors are willing to go along with a modest delay, but they want a scheduled date in 2008 for the trial. Judge Kaplan did not dismiss charges against the remaining five defendants because he was not persuaded that KPMG would have paid their legal expenses, even if the firm didn't face pressure from prosecutors.

Judge Kaplan rejected the defendants' request for a delay in the trial, saying, "in light of the Court's experience with this case for nearly two years, the Court has concluded that the proper balance between the public interest in getting on with this matter and the defendants' rights would be struck best by proceeding as scheduled."